If a Better Blend franchisee dies, who is responsible for transferring the business?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.13 Temporary Management. If (i) the Principal Executive dies or becomes incapacitated, (ii) this Agreement is terminated or expires and BBF elects to purchase assets of the Business as provided in Section 14.6, or (iii) Franchisee is operating the Business in a manner which, in BBF's reasonable opinion, constitutes a danger to the health or safety of any person, then BBF may (but is not obligated to) enter the Location and operate and manage the Business for Franchisee's (or Franchisee's estate's) account until this Agreement is terminated, the Business is transferred, the Business is purchased by BBF, or BBF returns the Business to Franchisee.
BBF's operation and management will not continue for more than 90 days without Franchisee's consent (or the consent of the representatives of Franchisee's estate).
If this Agreement has not terminated or expired, then BBF will account to Franchisee for all net income from the Business during the period in which BBF operates the Business.
BBF may collect a temporary management fee equal to 10% of Adjusted Gross Sales for the period in which BBF operates the Business, plus all expenses
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to the 2024 Better Blend Franchise Disclosure Document, in the event of the Principal Executive's death, Better Blend Franchising, LLC (BBF) has the option, but not the obligation, to enter the location and manage the business on behalf of the franchisee's estate until the franchise is either transferred, purchased by BBF, or returned to the franchisee's estate. This temporary management by BBF cannot exceed 90 days without the consent of the estate's representatives.
During this period of temporary management, if the Franchise Agreement remains active, Better Blend will provide an accounting of the net income generated from the business to the franchisee's estate. However, BBF is entitled to collect a temporary management fee, which is equivalent to 10% of the Adjusted Gross Sales, in addition to covering all expenses incurred during their operation of the business.
This arrangement provides a framework for business continuity during a difficult time, ensuring that the Better Blend outlet can continue operating while the franchisee's estate determines the long-term future of the franchise. However, the estate should be aware of the management fees and expenses that BBF may charge during this period, which could impact the overall profitability during the temporary management period. It is important for a prospective franchisee to understand these conditions and discuss with Better Blend the potential scenarios and implications in case of unforeseen circumstances.